The bailout bill and its failure to pass the House, coupled with the 777 point fall of the Dow at the beginning of the week, has really dominated the headlines recently so it’s not surprising that not many people have focused on this bit of news – the FDIC managed to broker the sale of Washington Mutual to JPMorgan Chase and parts of Wachovia to Wells Fargo (link) Citigroup and they didn’t bankrupt themselves (or go to the government for more money).

For weeks (if not months), people have talking about how the failure of Washington Mutual, the largest thrift with $307 billion in assets, and the failure of Wachovia, who had a loan portfolio of $312 billion, would bankrupt the FDIC. The FDIC isn’t entirely off the hook though, the FDIC is backing some of the downside loss on the bad debt, but as it stands right now they managed settle two big issues without much loss.

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What do investors do in these times.. does it really matter what happens on the vote on the bailout… we have been discussing this on myinvestorsplace.com … no one knows what to do… would like to hear opinions for us personally and for our country…

I didn’t really follow the Wachovia takeover, but what the FDIC did with the WM takeover was downright criminal. They took over a bank that had 150 billion dollars in assets (about 30 billion of those would have had to been written down or off) and sold it to another bank for 1.9 billion. They stock holders got nothing. WM was still above the required level of deposits that is mandated by the FDIC when the takeover occured. If they would have allowed WM to stay in business until the bailout package was passed, WM would have sold in the $6-$8 a share range to JP Morgan. Instead they were able to pick it up for about $.16 a share.

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